Vinati Organics Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting their Thirty-first Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31,2020.

1) FINANCIAL RESULTS:

The summarized position of these results is given below

(Rs. in lakhs)
Particulars As at 31st March 2020 As at 31st March 2019
Net Sales/lncome from Operations 102887.39 112792.36
Other Income 4498.92 3017.10
Total Income 107386.31 115809.46
Profit before Finance cost, Depreciation &Taxes 45892.53 45357.04
Finance cost 109.22 94.40
Profit before Depreciation & Taxes 45783.31 45262.64
Depreciation & Amortisation Expense 3316.05 2738.56
Profit before Taxation 42467.26 42524.08
Provision for Taxation - Current 9559.51 13861.73
Deferred (1408.51) 371.30
Earlier year adjustment 933.78 42.21
Profit for the year 33382.48 28248.84
Items that will be reclassified to profit or loss re-measurements of defined benefit plans (50.13) 1.00
Income Tax relating to items that will not be reclassified to profit or loss 12.62 (0.35)
Total other comprehensive income for the year, net of tax (37.51) 0.65
Net Profit for the year 33344.97 28249.49

2) COVID-19

In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lock-downs of all economic activity. For the Company, the focus immediately shifted to ensuring the health and well-being of all employees, and on minimizing disruption to services for all our customers globally. Factories restarted because of essential product. As of March 31, 2020, work from home was enabled to close to 100 percent of the corporate office employees to work remotely and securely. This response has reinforced customer confidence in Vinati Organics and many of them have expressed their appreciation and gratitude for keeping their businesses running under most challenging conditions.

Although there are uncertainties due to the pandemic and reversal of the positive momentum gained in the last quarter of FY-2020, the good balance sheet position, fair profitability and inherent resilience of the business model position the Company well to navigate the challenges ahead and gain market space.

3) REVIEW OF OPERATIONS:

The Net Sales/lncome from operations achieved during the year is Rs.102887.39 Lakhs compared to Rs.112792.36 Lakhs in the last Financial Year 2018 - 19. The net profit after tax increased to Rs.33382.48 Lakhs as compared to Rs.28248.84 Lakhs in the previous year up by 18%.

4) STATE OF AFFAIRS:

The Company is engaged in the business of manufacturing of specialty organic intermediaries and monomers.

There has been no change in the business of the Company during the financial year ended March 31,2020.

5) DIVIDEND:

For FY 2020, based on the Companys performance, the Directors have declared interim dividends of ?5 per equity share. The Directors have also recommended a final dividend of ?50 paisa per equity share of the face value of ?1 each, taking the total dividend to ?5.50 per equity share.

The final dividend on equity shares, if approved by the Members, would involve a cash outflow of ?513.91 Lakhs. The total dividend on equity shares including dividend tax for FY 2020 would aggregate to Rs.6709.37 Lakhs, resulting in a dividend payout of 20% of the profits of the Company.

For FY 2019, the Company paid a total dividend of Rs.7 per equity share of the face value of tl each. The total cash outflow for FY 2019 including dividend and dividend tax amounted to ?4336.82 Lakhs.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") is disclosed in this report as Annexure A and is uploaded on the Companys website https://www.vinatiorganics.com

6) SUB-DIVISION OF FACE VALUE OF EQUITY SHARES

The Members had passed Resolution approving Sub-division of one Equity Share of face value of T2J- each into two Equity Shares of face value of ?1/- each through Postal Ballot dated December 25, 2019. The record date for the aforesaid subdivision was February 06, 2020. Accordingly, the face value of equity shares of the Company stands reduced to ?1/- per share.

7) SUBSIDIARY COMPANY:

The Company does not have any subsidiary company.

8) INSURANCE:

The properties and insurable interest of your company like Building, Plant and Machinery, Inventories etc. are properly insured.

9) DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Act and the Articles of Association of the Company, Ms. Vinati Saraf Mutreja, Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered herself for re-appointment.

During the year, Mr. R. K. Saraswat, has ceased to be NonExecutive and Independent Director upon completion of his second term, effective from April 1, 2020. The Board appreciated his valuable advice and guidance to the Company during the tenure of his term as director of the Company.

Further on the recommendation of Nomination and Remuneration Committee, Shri Jagdish Chandra Laddha (DIN: 00118527) has been appointed as Additional Director - NonExecutive and Independent Director of the Company w. e. f. June 13,2020 by the Board in its meeting held on June 13,2020.

On being attained at an age of 70 years on June 16, 2020 as Executive Chairman, by Shri Vinod Saraf, an approval of members by passing a Special Resolution under Section 196 read with Schedule V of the Companies Act, 2013 (here in after to be referred as the "Act") is required.

Accordingly, the existing resolution and terms approved by the members by passing the Resolution no. 5 of the Notice and the Explanatory Statement annex thereto of 30th AGM of the Company held on July 27, 2019 is proposed to modify in compliance of Section 196,197,198, Schedule V and other applicable provisions of the Act, read with relevant Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and members approval is sought for appointment/continuation of appointment and remuneration of Mr. Vinod Saraf as Chairman and WholeTime Director, designated as "Executive Chairman" as per the item no. 5 set out in the Notice of 31st AGM.

Further, compliance to the provisions of Regulation 17(1 B) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, effective from April 1, 2022, the Company shall ensure that the Chairperson of the Board shall be a Non-Executive Director and shall not be related to the Managing Director or the Chief Executive Officer of the Company

The Company has received all the applicable declarations under Section under 149(7) of the Act, Rule 6(3) of the Companies (Appointment and Qualification of Directors) 5th Amendment Rules, 2019 and Regulation 16(1 )(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") from each Independent Director. There have been no circumstances affecting their status as independent directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Key Managerial Personnel Shri Vinod Saraf - Chairman, Ms. Vinati Saraf Mutreja - Chief Executive Officer and Managing Director, Ms. Viral Saraf Mittal - Director-CSR, Mr. NK Goyal - Chief Financial Officer (CFO), Mr. Jayesh Ashar- Chief Operating Officer (COO) and Mr. Milind Wagh - Company Secretary, are the Key Managerial Personnel of the Company in accordance with the provisions of Sections 2(51)203 of the Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

10) POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of this report. The Remuneration policy has been posted on website of the Company at www. vinatiorganics.com.

11) FIXED DEPOSITS:

During the year under review the Company did not invite or accept any Fixed Deposits from public within the meaning of Sections 73 and 76 of the Act and as such, no amount of principal or interest was outstanding as on the date of balance sheet.

12) FOREIGN EXCHANGE EARNINGS AND OUTGO:

The company had a total foreign exchange earnings and outgo as provided below during the year ended 31 " March, 2020:

Foreign Exchange Earnings - f78,245.32 Lakhs Foreign Exchange Outgo - ? 14,881.60 Lakhs

13) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO:

Information as per Section 134 (3) (m) of the Act, read with Companies (Accounts) Rules, 2014, relating to the above head are given in Annexure B forming part of this report.

14) HUMAN RESOURCE:

The Company believes that Human Resources play a very critical role in its growth. Its management has infused a lot of rigor, intensity in its people Development Processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to Employees. For the development of the Employees, the Company has created a structured training framework for the employees to ensure their ongoing education.

The Groups Corporate Human Recourses function has played and continues to play an integral role in the Companys talent management process.

15) QUALITY INITIATIVES:

Sustained commitment to highest levels of quality, best- in-class service management, robust information security practices and mature business continuity processes helped the Company attain significant milestones during the year.

16) LISTING:

The Companys equity shares are listed at BSE & NSE. We confirm that the Listing fee for the financial year 2020 - 21 has been paid. The stock code of the company at BSE is 524200 and NSE is VINATIORGA.

17) SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS:

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.

18) DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2019-20.

19) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31 ST MARCH, 2020):

No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial Year (FY20) of the Company to which the Financial Statements relate and the date of this report.

20) CORPORATEGOVERNANCEANDMANAGEMENTS DISCUSSION AND ANALYSIS REPORTS :

The Corporate Governance and Managements Discussion and Analysis Reports, which form an integral part of this report, are set out in separate annexures to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015,. See Annexires C, D & E

21) EMPLOYEES:

The Company is required to make disclosure under Section 134 of the Act for its employee drawing remuneration in excess of ?1.02 Cr RA. or ?8.50 Lakhs Per month. See Annexure *F

Employee holding 2% or more of the equity shares by himself/herself or along with his/her spouse:

1. Mr. Vinod Saraf - Executive Chairman - 13900582 shares -13.52%

2. Mrs. Kavita Vinod Saraf - Spouse - 12414456 shares - 12.08%

NO CHANGE IN THE CLASS AND NATURE OF THE BUSINESS OF COMPANY OR ITS SUBSIDIARIES:

There has been no change in the class and nature of the business of the Company. The Company does not have any Subsidiary Company.

22) CORPORATE DEVELOPMENT:

During the reporting period the shareholders approvals were sought for the following businesses through postal ballot dated December 25,2019;

Item No Description of the Resolution Kind of Resolution
1. Sub-division of one Equity Share of face value of T2J- each into two Equity Shares of face value of n/-each, Special Resolution
2 Alteration of the Capital Clause of Memorandum of Association ("MOA") of the Company. Ordinary Resolution
3 The alteration of the Articles of Association ("AOA") of the Company Special Resolution
4 VOL Employee Stock Option Plan 2019. Special Resolution

23) COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee of the Company as on 31st March, 2020 comprised the following Directors of the Company:

1. Mr. R. K. Saraswat: Independent Director - Chairman (Till March 31,2020)

2. Mrs. Mona Bhide: Independent Director - Member

3. Mr. Adesh Kumar Gupta: Independent Director - Member

4. Mr. J. C. Laddha (Effective from June 13,2020)

24) ESOP/ ESOS:

During the year under review, the Company has approved "VOL Employee Stock Option Plan 2019" ("ESOP 20197 "Plan") Scheme of the Company. The ESOP 2019 Scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (the SEBI Regulations).

Pursuant to the approval by the shareholders, the Company can grant up to 200000 options to the eligible employees of the Company under the ESOP 2019.

Disclosures pertaining to the ESOP 2019 Scheme pursuant to the SEBI Regulations are placed on the Companys website www.vinatiorganics.com

25) SWEAT EQUITY:

The Company has not issued any sweat equity.

26) PREFERENTIAL ALLOTMENT:

The Company has not issued any shares as a preferential allotment.

27) REDEMPTION OF SHARES/ DEBENTURES:

The Company has not redeemed any Shares or Debentures.

28) DISQUALIFICATION OF DIRECTOR:

No Director of the Company is disqualified under any law to Act as a Director.

29) CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility Committee was constituted on 10th May, 2014 and reconstituted on 26th February, 2015 as per Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. This committee comprises the following Directors of the Company.

All the members of Corporate Social Responsibility Committee mentioned above i.e. Mr. Vinod Saraf, Chairman, Mr. R. K. Saraswat, Director (upto March 31, 2020), Ms. Vinati Saraf Mutreja, Managing Director & CEO, Dr. Prof. M. Lakshmi Kantam, Independent Director (w.e.f 13.06.2020) & Ms. Viral Saraf Mittal, Director- CSR have good knowledge and exposure to utilize the Companys resources towards its corporate social responsibility. The Corporate Social Responsibility policy is available on Companys website.

The average profit of the Company for last three years is ?555.50 Lakhs. Prescribed CSR expenditure is Rs.366.95 Lakhs. Details of CSR spent during the financial year 2019 - 20 are as per Annexure G enclosed. Amount unspent during the year is ?188.55 Lakhs as good projects were not found till 31.03.2020. The Corporate Social Responsibility (CSR) policy of the Company has been posted on website of the Company at www.vinatiorganics.com.

30) POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment of Women at Workplace Act") and Rules framed there under and an Internal Complaints Committee consisting of Ms. Vinati Saraf Mutreja, Managing Director & CEO, Ms. Viral Saraf Mittal, Director - CSR and Advocate Ms. Satyapriya M. Rao. The Committee has been setup to address complaints received regarding sexual harassment.

The Company has ensured organization wide dissemination of the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act by conducting sessions throughout the Company.

During the period under review, no complaints were received. The Company is committed to providing a safe and conducive work environment to all of its employees and associates. The Sexual Harassment policy posted on the website of the Company at www.vinatiorganics.com

31) EXTRACT OF ANNUAL RETURN- MGT - 9:

Extract of Annual Return for financial year ended 31.03.2020 (Pursuant to section 92(3) of the Act, read with the Companies (Management and Administration) Rules, 2014) in the prescribed Form No. MGT-9 is given in the Annexure H which is a part of this report. The same is available on website of the Company at www.vinatiorganics.com

32) RISK MANAGEMENT:

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The risk management policy has been posted on website of the Company at www.vinatiorganics.com.

33) PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company had not given any loans and guarantees. The Company had made investments amounting to Rs.22739.46 Lakhs as given below

(Rs. in lakhs)
Description of the Resolution Kind of Resolution
Mutual Fund
132777.592 Units- HDFC Liquid Fund - Direct - Growth 5,187.10
1368984.676 Units ICICI Prudential Savings Fund - Direct - Growth 5,344.11
13446266.227 Units Kotak Savings Fund - Direct - Growth 4,417.60
Exchange Traded Fund
300000 Units Bharat Bond ETF - April 2023 3,003.00
Non-Convertible Debenture
80 Units Aditya Birla Finance Ltd - NCD 858.24
1000 Units Citicorp Finance (I) Ltd - NCD 1,064.80
50 Units HDB Financial Services Ltd. - NCD 584.22
200 Units India Infoline Finance Ltd. - NCD 2,280.40
Total 22,739.46

34) DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

35) PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Sr. No. Whole-time directors Ratio to median remuneration
1. Mr. Vinod Banwarilal Saraf, Chairman 30.79
2. Ms. Vinati Saraf Mutreja, Managing Director & CEO 21.56
3. Ms. Viral Saraf Mittal, Director - CSR 12.33

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Sr. No. Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
1. Mr. Vinod Banwarilal Saraf, Chairman 10%
2. Ms. Vinati Saraf Mutreja, Managing Director & CEO 10%
3. Ms. Viral Saraf Mittal, Director - CSR 10%
4. Mr. Jayesh Ashar, Chief Operating Officer 12%
5. Mr. N. K. Goyal, Chief Financial Officer 11%
7. Mr. Milind Wagh, Company Secretary 10%

c. The percentage increase in the median remuneration of employees in the financial year: 9.42%

d. The number of permanent employees on the roll of Company: 865

e. The explanation on the relationship between average increase in remuneration and Company performance:

The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects company performance, the performance pay is also linked to organization performance, apart from an individuals performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY20 (Rs. in Lakhs) 496.34
Revenue (Rs. in Lakhs) 102887.39
Remuneration of (KMP) as a 0.48
percentage of revenue
Profit before tax (PBT) (Rs. in Lakhs) 42467.26
Remuneration of (KMP) as % of PBT 1.17

g. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31, 2020 March 31, 2019 % change
Market capitalization (Rs. In Lakhs) 791421.79 845896.27 -6%
Price earnings ratio 23.70 29.94 -21%

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars March 31, 2020 (Rs.) November 11,1991 (IPO)* % change
Market Price 770 0.67 115689
(BSE)
Market Price 775 0.67 116441
(NSE)

* Adjusted for 1:2 bonus issue in 2007, splits of Fsce Vslue of shores from 710/- to 72/- end from 72/- to 71/- on 03.11.2009 end February 6,2020 respectively.

i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Increase in managerial remuneration was 10% only.

j. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

(Rs. in Lakhs)
Name Total Remuneration % of revenue 102887.39 % of net profit before tax 42467.26
Mr. Vinod Banwarilal Saraf, Chairman 152.26 0.15 0.36
Ms. Vinati Saraf Mutreja, Managing Director & CEO 114.94 0.11 0.27
Ms. Viral Saraf Mittal, Director - CSR 64.92 0.06 0.15
Mr. Jayesh Ashar, Chief Operating Officer 92.38 0.09 0.22
Mr. N. K. Goyal, Chief Financial Officer 71.84 0.07 0.17
Mr. Milind Wagh, Company Secretary 27.60 0.03 0.06

k. The key parameters for any variable component of remuneration availed by the directors:

No variable component is paid.

l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

None.

m. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

n. The statement containing particulars of employees as required under Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Annexure T. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

36) WHISTLE BLOWER POLICY/VIGIL MECHANISM:

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the website of the Company at www.vinatiorganics.com.

37) TRANSACTION WITH RELATED PARTIES:

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act, read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure J in Form AOC-2 and the same forms part of this report.

38) BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board meetings, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5,2017.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

39) INDEPENDENT DIRECTORS MEETING:

The Independent Directors of the Company met on 2nd March, 2020, inter-alia to discuss:

(i) Review the performance of non-independent Directors and the Board of Directors as a whole;

(ii) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors;

(iii) Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into accountthe views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. Annexure K

40) NUMBER OF MEETINGS OF THE BOARD:

The meetings of the Board of directors held during the period under review are as follows;

On 11.5.2019, 30.7.2019, 12.11.2019, 31.01.2020, 02.03.2020, 13.06.2020 and 01.08.2020. For details of the meetings of the board, please refer to the Corporate Governance Report, which forms part of this report.

41) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report.

42) AUDIT COMMITTEE:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

43) REPORTING OF FRAUDS:

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.

44) TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:

As required under Section 124 of the Act, 41900 equity shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more, have been transferred by the Company to the Investor Education and Protection Fund Authority (IEPF) during the financial year 2019 - 20 . Details of shares transferred have been uploaded on the website of I EPF as well as the Company.

45) AUDITORS AND AUDIT REPORTS:

(i) Statutory Auditors and their Report:

The Members at the 28th Annual General Meeting of the Company held on 29th July, 2017, had appointed M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122/W) as the Statutory Auditor of the Company to hold office for a term of five years i.e., from the conclusion of the said 28th Annual General Meeting until the conclusion of 33rd Annual General Meeting of the Company to be held in the year 2022, subject to ratification of their appointment by the shareholders, every year. The Ministry of Corporate Affairs vide its Notification dated 7th May 2018, has dispensed with the requirement of ratification of Auditors appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditors appointment is not included in the Notice of the ensuing Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2020.

(ii) Cost Auditors and Cost Audit Report:

As per the requirements of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is applicable to the

Company and the Audit of the said Cost Records is being carried out every year. The Board of Directors, based on the recommendation of the Audit Committee, the Cost Auditors certfying their Independence and arms length relationship with your company, has appointed M/s. N. Ritesh & Associates, Cost Accountants, as Cost Auditor of the Company for conducting the Cost Audit for the financial year 2020-21, on such remuneration as mentioned in the Notice of the 31st Annual General Meeting. A resolution seeking Members ratification for the remuneration payable to the Cost Auditor forms part of the Notice of 31st Annual General Meeting and the same is recommended for your consideration and ratification.

In accordance with Companies (Cost Records and Audit) Rules, 2014, the due date for filing the Cost Audit Report in XBRL for the financial year ended 31.03.2019 was 28.02.2020 and the same was filed on 01.10.2019 vide SRN No.:H99029522 with the Ministry of Corporate Affairs, New Delhi.

(iii) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Act and the rules made there under, the Company had appointed M/s. VKM & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the year ended 31st March, 2020. The Secretarial Audit Report issued in this regard is annexed as Annexure - L. The Auditors Report and the Secretarial Audit Report for the financial year ended 31st March, 2020 do not contain any qualification or reservation or adverse remark.

46) CORPORATE POLICIES AND PROCEDURES ON INTERNAL FINANCIAL CONTROLS:

The Corporate Policies and Procedures on Internal Financial Controls policy has been posted on website of the Company at www.vinatiorganics.com

47) BUSINESS RESPONSIBILITY REPORT:

As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility Report is attached and is a part of this Annual Report as set out in Annexure M of this report and is also available on Companys website www.vinatiorganics.com

48) STATUTORY DISCLOSURES:

There were no transactions/events with respect to the following items during the financial year under review and accordingly no disclosure or reporting is required with respect to the same:

1. Deposit from the public falling within the ambit of Section 73 of the Act, and the Companies (Acceptance of Deposits) Rules, 2014.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Receipt of any remuneration or commission by the Managing Director/Whole-time Director of the Company from any of its subsidiaries/ other Companies.

4. Significant or material orders passed by the regulators or courts or tribunals which impact the going concern status and the Companys operations in future.

5. Buyback of shares.

6. Material changes and commitments, affecting the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this Directors report unless otherwise stated in the report. The details pertaining to the composition of various committees of the Board including the Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Risk Management Committee and Corporate Social Responsibility Committee and the details of establishment of Vigil Mechanism are included in the Corporate Governance Report, which is a part of this report.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

49) APPRECIATION & ACKNOWLEDGEMENTS:

Your Directors take this opportunity to place on record their sincere gratitude for assistance and cooperation received from Central & State Governments, banks, financial institutions, shareholders, business associates and esteemed customers for their continued support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, co- operation and diligence to duty in achieving consistent growth of the Company.